Tuesday, September 17, 2019
Acct553 Homework Es
1. (TCO A) A taxpayer may litigate a tax dispute without first paying the tax in the: (Points : 5)|        U. S. District Court. U. S. Tax Court. U. S. Court of Federal Claims. All of the above | 2. (TCO F) A business bad debt is deductible for tax purposes as a(n): (Points : 5)|        ordinary business deduction. short-term capital loss. long-term capital loss. miscellaneous itemized deduction. | 3. (TCO I) Under the cash method of tax accounting, tax deductions are generally taken when: (Points : 5)|        payment is made. the liability arises. there is net income to absorb the expense.None of the above | 4. (TCO A) Which of the following constitutes tax evasion? (Points : 5)|        Arranging your affairs to keep your tax liability as low as possible under the tax law        Failing to disclose a tax liability from a completed transaction        Trying to maximize profits Trying to minimize your tax liability. | 5. (TCO C) Which of the following items is subject to federal income tax? (Points : 5)|        Interest on U. S. Treasury bonds Gambling winnings Interest on loans made in the ordinary course of business        All of the above | 6. (TCO B) Sam owes Bob $8,000.Bob cancels (forgives) the debt. The cancellation is not a gift, but Sam is insolvent. Which of the following statements is correct concerning the impact of this transaction? (Points : 5)|        Both Bob and Sam recognize $8,000 of taxable income. Bob recognizes $8,000 of taxable income. Sam recognizes $8,000 of taxable income. Neither Bob nor Sam has any taxable income from this transaction. | 7. (TCO I) David, a cash basis taxpayer, owns two rental properties. Based on the following information, compute the amount that he must include in his 2012 gross rental income.Property #1, security deposit on one-year lease received 2/1/12 All of deposit returned at lease end: $1,000 Property #1, payment received 2/1/12 for last month of lease(1/13): $900 Property #1, rental income received in 2012 2/12-12/12: $8,000 Property #2, rental income received in 2012 1/12-12/12: $9,600 Property #2, security deposit received 1/1/12 to be used for last month's rent: $800 Property #2, rent 1/13 received 12/28/12: $800 (Points : 5)|        $21,100 $19,300 $18,500 $20,100 | 8. (TCO F) Section 197's intangible assets, such as patents and trademarks, are amortized for tax purposes over: (Points : 5)| years. 15 years. 10 years. 20 years. | 9. (TCO E) Explain the constructive receipt doctrine. (Points : 17)            | 10. (TCO G) Answer the following questions concerning tax laws. a. What roles do the U. S. Constitution and U. S. Congress play in creating the tax law? b. What does the common body of tax law (CBOTL) consist of? Br iefly explain how a tax bill becomes a tax law. c. What role does the Internal Revenue Service play in interpreting, and providing guidance on, the tax law? What types of tax law guidance are published by the IRS? (Points : 18)            |
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